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- Terraform liquidator accuses Jane Street of insider trading
- Lawsuit cites Curve pool withdrawals during Terra collapse
- Jane Street denies claims, vows aggressive legal defense
Terraform Labs’ liquidation has entered a new legal chapter, as its court-appointed administrator has filed a lawsuit against Jane Street over alleged trading misconduct during the TerraUSD meltdown. The lawsuit redirects attention from internal malfunctions to external market players, broadening the area of responsibility to the 2022 failure that wiped billions of dollars in value across the crypto sector.
Todd Snyder, the manager who supervises the winding down of Terraform Labs, sued Jane Street, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang. Snyder states that the company acquired non-public information from Terraform insiders and front-ran trades at critical moments of the crisis, according to the complaint cited in the Wall Street Journal.
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Administrator Seeks Recovery for Creditors
According to Snyder, Jane Street took advantage of some of the market’s most critical relationships, and TerraUSD plummeted to the bottom. Further, he stated that his office will also take every possible step to obtain the largest number of recoveries for creditors. He claimed that some players in the market had been making huge profits whilst the ecosystem continued to worsen.
Jane Street did not accept the allegations because she opposed the claims. The company allegedly described the downfall of Terra Luna as a consequence of a multibillion-dollar fraud committed by Terra Luna’s management. It also indicated that it will fiercely fight against what it terms as predatory litigation.
Alleged Insider Communication Channels
The complaint describes a case in which Bryce Pratt, who was formerly employed at Terraform and later joined Jane Street, is accused of staying in touch with former colleagues. Such contacts were said to cover a Terraform software engineer and a business development executive. According to Snyder, one of the chat groups was a backdoor to internal Terraform information.
Accordingly, the administrator claims that Jane Street had prior knowledge of decisions of operation yet to be publicized. He accuses this access of giving an unfair trade advantage at a time when the market was volatile.
Curve Pool Withdrawals Raise Timing Questions
Among the main episodes mentioned in the case, there was the one on May 7, 2022. Terraform drained 150 million TerraUSD from Curve3pool without any advance notice. In ten minutes, a wallet attributed to Jane Street withdrew another 85 million TerraUSD from the same pool.
The complaint goes on to say that the withdrawal details were disclosed, but the timing was not. As such, Snyder argues that the sequence implies the availability of confidential information.
Jump Trading Also Referenced in Filing
The suit also refers to Jump Trading, to which Snyder had earlier sued because of claims of having had arrangements related to TerraUSD support work. In this new filing, Snyder asserts that there may have been non-public information that found its way to Jane Street via Jump channels.
Terraform Labs, the company run by Do Kwon, collapsed when TerraUSD lost its dollar peg in 2022. The collapse erased over $40 billion of market value and caused massive bankruptcies. In 2024, the company went bankrupt and settled its debts with the Securities and Exchange Commission for $4.47 billion. Also, Kwon was sentenced to 15 years in prison in the United States after pleading guilty to criminal charges.
Snyder’s move in the case against Jane Street draws legal attention to Terra’s demise. The case can help explain how courts evaluate information-sharing and trading behavior as proceedings progress under extreme market stress.
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